The Japanese currency gained against all 16 most traded currencies as economic concerns continue to rise around the world, causing another day of losses in stock markets, and spurring demand for the safety of the yen.
After a World Bank report indicating that the recession will be deeper than previously imagined, equities markets had a negative performance in different continents and risk aversion is back among investors, creating a perfect scenario for the yen to rally against all major currencies. The U. S. dollar lost ground against the Japanese currency as a report tomorrow is likely to show a decrease in durable goods orders. The South Korean won continue to lose against the yen as speculations indicate that tensions in North Korea may escalate. The yen lost intensively since signs of economic recovery started to appear, but as uncertainties about a world economic rebound rose, the Japanese currency is once again attractive.
Analysts refer the current yens rally with a lack of confidence in markets that the world will find its way out of recession easily and quickly, as there are still many factors indicating that the situation is far from controlled or resolved in many industrial sectors and economies around the world. We will tend to see a strong yen if solid evidences of economic recovery fail to appear, due to its refuge investment profile.
USD/JPY traded at 95.25 as of 10:47 GMT falling from 96.00 in the intraday comparison. AUD/JPY dropped from to 76.45 to 74.73.
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